84% of Albanian businesses declare that they are affected by the pandemic crisis. 

Bank of Albania has conducted two surveys on the effects of Covid-19 on business activity, as part of the confidence surveys in the economy, in April and September, respectively. 

In April, about 90% of businesses that responded said that their activity was affected by the epidemic, while in September, this ratio decreased to 84%, mainly affected by the industry and construction sector. The opposite has happened with service businesses, where the number of businesses that are said to have been affected is higher in September. 

Regarding the question of how they are affected, businesses consider the reduction of demand from domestic customers as the most important. The importance of this factor has increased compared to the onset of the pandemic and reached about 42% of business responses in September, compared to 34% in April. In line with the easing of the measures taken, the forced closure of the activity, which affected the measure of 23% in April has decreased to 13% in September. The decrease in demand from domestic customers is identified as the factor with the greatest impact on the categorization of businesses by size, with a particularly greater weight for micro-enterprises. 

Businesses have chosen as the main alternatives to cope with the situation the delay of payments, in 30% of cases, and the temporary reduction of the number of employees, in 27% of cases, to a similar extent in both surveys. The main change is seen in the activity closure alternative, which was considered in April, with 14% of total responses, but not in September, with only 2% of business responses. The most considered alternative by businesses in September is the increase in debt from others, which has reached 12% of businesses, from 4% in April. In both surveys, businesses did not consider permanently reducing the number of employees as an alternative.

Even by size, the main alternatives to cope with the situation result as above. In September, there is an increase in the weight of the alternative "Increasing debt from others" for micro and small enterprises. Meanwhile, the “Increase in bank borrowing” alternative results in a higher share in September for medium and large enterprises. 

In general, businesses expect to return to a normal situation (understood as the situation before Covid-19) after approximately 10 months. Compared to April, when the crisis was expected to be more temporary, this period has doubled. By size, the return time to the normal situation turns out to be higher for small businesses.

(Source: Monitor)